Articles Tagged with cryptocurrency scam

Chicago-based Stoltmann Law Offices is representing investors who’ve been victims of cryptocurrency thefts. These days, cryptocurrencies or “digital cash” are all the rage. You can speculate with it, buy a few consumer goods, and even play games. Unfortunately, like any currency that is a store of value, it can be stolen.

One of the largest heists in the short history of cryptocurrencies occurred recently when customers of Axie Infinity, a play-to-earn online game, lost some $625 million to a thieving hacker.

It was reported that the Axie account was hacked on March 23rd, although it was only revealed on Tuesday, March 29th.  According to Yahoo News, “Axie Infinity remains one of the most popular play-to-earn games, and users continued to log on Wednesday after news of the crypto heist. Hackers targeted a vulnerability in the bridge — or a software mechanism for exchanging types of crypto tokens — to drain funds in two separate transactions.”

Stoltmann Law Offices is a Chicago-based securities, investment fraud, and class action law firm offering representing to defrauded investors and victims of fraud nationwide on a contingency fee basis.  We have been closely monitoring allegations that IRA Financial Trust account owners had over $36 million in crypto-currency stolen from their IRAs through a hack of their system on or around February 8, 2022. IRA Financial partners with Gemini Trust Co. to offer the opportunity for its self-directed retirement account clients to invest in cryptocurrency. IRA Financial represents on its website that “Our Trust company’s focus on compliance and security is based on three principles: State regulated, Industry-leading technology, and FDIC protection of cash up to $250,000 through Capital One.” The company goes on the admit that it “must meet the capitalization, compliance, anti-money laundering, consumer protection, and cybersecurity requirements set forth by the South Dakota Division of Banking, and protect the interests of our customers first and foremost.” In specifically representing their stringent “Infrastructure Security”, IRA Financial Trust represents that:

  • We leverage the content-security policy (CSP) and HTTP Strict Transport Security (HSTS) features found in modern browsers.
  • We partner with enterprise vendors to mitigate distributed denial-of-service (DDoS) attacks.

Stoltmann Law Offices, P.C. is a Chicago-based securities and investor-protection law firm offering representation to defrauded investors nationwide on a contingency fee basis. We have been prosecuting claims against cellular phone providers like T-Mobile, AT&T, and Verizon on behalf of victims of SIM-Swap attacks for the past few years now. We are also actively pursuing claims against Coinbase for its role in failing to secure their customer accounts in violation of the terms of their user agreement.

Recently, there has been a flood of SIM Swap attacks against T-Mobile customers. Although it is speculation, this summer, T-Mobile announced that its customer database had been compromised, leading to the unauthorized access to customer account information effecting over 40 million subscribers.  That attack, as time has gone by, has been revealed to have been far worse than originally reported.  T-Mobile updated its customers a few months ago, and suggested that the attack compromised critical security information about its customer accounts, including phone numbers, customer names and addresses, dates of birth, IMEIs and IMSIs.  T-Mobile said in a statement that it had no indication that hackers were able to access financial information such as credit card or debit card data.  By way of background, an IMSI is the unique “International Mobile Subscriber Identity” number which identifies every cellular network user. It is a unique 15-digit number assigned to every user and is part of your SIM profile. SIM is another acronym for “Subscriber Identity Module.” The IMSI identifies where you use your phone and which mobile network (i.e., T-Mobile) you access.  This is critical intelligence for anyone seeking to pull off a SIM Swap.

Although the hackers didn’t apparently gain access to sensitive financial data of customers, they did get a picnic basket of information that was surely sold to other hackers. If a hacker has your phone number, name/address, and IMSI, getting a SIM swap done is pretty simple unfortunately. These hackers identify people known to have crypto-currency accounts and then engineer hacks of their SIM so that they can gain access to a target’s Coinbase account and transfer the funds to another wallet on the blockchain and move on to the next victim. Because of the anonymous nature of crypto-currency transactions on the blockchain, the transactions are virtually untraceable and cannot be reversed.  This massive attack on T-Mobile, which compromised millions of customer accounts, is likely leading to a surge in SIM Swap-Crypto theft attacks. These massive data breaches by cellular providers are not  a new phenomenon and occur far too often. The good news for victims is, cellular providers like T-Mobile, AT&T, and Verizon can be held liable for a SIM Swap attack that leads to the loss of crypto currency or other financial accounts.

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from fraudulent investments scams for over fifteen years.  Recently, common scams involve precious metals and the latest craze, cryptocurrency. When the price of any commodity goes up dramatically – from gold to digital cryptocurrencies – you can bank on the fact that scammers are pitching hard to lure investors into a trap. Many investments pitched on the internet fall into this murky pool.

The top threats to investors, not surprisingly, are Internet- and social-media based promotions, according to the North American Securities Administrators Association (NASAA), a securities regulator trade association. These frauds are often pitched to owners of self-directed Individual Retirement Accounts (IRAs), many of which are tied to brokerage services.

“Self-directed individual retirement accounts, which lack the services and protection of traditional IRAs, can be fertile soil for scammers, especially those involving cryptocurrency-related and precious metals-based investments,” Investment News reported.

AdobeStock_50775754-2-300x200The Securities and Exchange Commission (SEC) obtained a court order halting an allegedly fraudulent initial coin offering (ICO) that targeted retail investors to fund what claimed to be the world’s first “decentralized bank.” The complaint was filed in federal district court in Dallas, Texas on January 25th and was unsealed yesterday. AriseBank and its co-founders Jared Rice Sr. and Stanley Ford allegedly offered and sold unregistered investments in their AriseCoin cryptocurrency by depicting the bank as a decentralized bank offering a variety of products and services using more than 700 virtual currencies. The bank, based out of Dallas, also claimed it developed an algorithmic trading application that automatically trades in various cryptocurrencies. The complaint alleged that AriseBank falsely stated that it purchased an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it offered them VISA cards to spend on the 700 cryptocurrencies. AriseBank also allegedly failed to disclose the criminal background of its executives. The court has since approved an emergency asset freeze over AriseBank, Rice and Ford, and appointed a receiver over AriseBank, including its digital assets.

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